In this study, we evaluated the anti-inflammatory effect of extract from Cudrania tricuspidata twig sawdust fermented with Ganoderma lucidum mycelium. Fermented Cudrania tricuspidata twig sawdust extracted with 70% ethanol and elucidated the potential signaling pathway in lipopolysaccharide (LPS)-induced RAW264.7 cells. Fermented Cudrania tricuspidata twig sawdust inhibits LPS-stimulated nitric oxide (NO) production without affecting cell viability in a dose-dependent manner and production of LPS-induced pro-inflammatory cytokines such as interleukin (IL)-1β, tumor necrosis factor (TNF)-α and prostaglandin2 (PGE2). Fermented Cudrania tricuspidata twig sawdust also suppressed the expression of the pro-inflammatory mediators such as inducible nitric oxide synthase (iNOS) and cyclooxygenase-2 (COX-2) in LPS-stimulated RAW264.7 cells. Moreover, Fermented Cudrania tricuspidata twig sawdust significantly attenuated LPS-induced IkappaB (IκB) degradation and suppressed nuclear factor kappa B (NF-κB) nuclear translocation. These results suggest that fermented Cudrania tricuspidata twig sawdust may have great potential for the development of anti-inflammatory agent.